Asian bank slashes growth rate for Thailand to 2.9 per cent

Breaking News April 01, 2014 00:00

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Thailand's economy is expected to grow only 2.9 percent this year and could fare worse if no "fully functional government" is in place by the second semester, the Asian Development Bank forecast Tuesday.

Five months of anti-government protests in Bangkok and the failure to set up a new government have taken a toll on the consumer and tourism sectors, prompting the ADB to slash its previous forecast of 4.5 to 5 per cent growth for 2014, its senior Thailand economist Luxmon Attapich said.

"What will happen is consumer confidence will continue to drop, investors will take a wait-and-see stance and the government budget for fiscal 2015 will not be there, so investments will not happen," Luxman said at the Bangkok launch of the bank's Asian Development Outlook report.

A government needs to be in place to approve the annual budget by the October 1 beginning of the fiscal year. The ADB warned that economic growth will be lower than 2.9 per cent if a new administration is not in place by then.